Intersouth Partners

Alimera Adds $5M From Insiders To Series C, Awaits Phase III Data

Dow Jones VentureWire08.28.09

Alimera Adds $5M From Insiders To Series C, Awaits Phase III Data

Alimera Sciences Inc., which pulled its registration to go public in April, has tapped insiders for $5 million while it awaits top-line Phase III data in December for its new diabetic macular edema therapy.

With positive results, the company could take a second shot at going public or consider other options, such as a partnership to bring the drug, Iluvien, to market. The financing, which adds to a $30 million Series C announced in March 2008, gives Alimera a runway that extends beyond the clinical data coming in, according to Garheng Kong, a general partner of company backer Intersouth Partners. Intersouth participated with insiders Domain Associates, Polaris Venture Partners, Scale Venture Partners and Venrock. Valuation was not disclosed.

These investors received warrants for an additional $10 million in Series C preferred stock. The financing calls for them to have up to 30 days from the delivery of Phase III top-line data to exercise them. If the majority of the warrant holders exercise their options, all the warrant holders will be required to exercise their warrants in full, according to the company. Alimera executives declined to comment.

Alimera filed to go public in July 2008, but concluded early this year that an initial public offering wasn't practical in today's market. This new financing gives the Alpharetta, Ga.-based company extra breathing room and enables its backers to put more money in if they're satisfied with the Phase III data.

In a somewhat similar arrangement, venture backers of D-Pharm Ltd., which went public on the Tel Aviv Stock Exchange early this month, recently participated in a financing in which they gained shares and options to buy additional shares within 30 months. This will enable them to wait until D-Pharm has interim Phase III data for its neuro-protective drug for ischemic-stroke patients before deciding whether to exercise the options.

Alimera investors hope the company will become the first to introduce a treatment for diabetic macular edema, a disease of the retina that can lead to severe vision loss and blindness.

Iluvien inserts are designed to provide a sustained therapeutic effect of up to 36 months by delivering a low daily dose of fluocinolone acetonide, a corticosteroid that has been shown to be effective in treating ocular diseases, according to the company. A low-dose Iluvien treatment provides therapeutic effect for up to 24 months.